Bill vs. Bill: The Permanent Fund lawsuit's day in court - Must Read Alaska
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Saturday, June 12, 2021
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Bill vs. Bill: The Permanent Fund lawsuit’s day in court

Photo of people sitting in a courtroom waiting for the oral arguments.

Alaskans were sprinkled throughout the courtroom in anticipation of the lawsuit challenging Gov. Bill Walker’s veto of half of the 2016 Permanent Fund dividend.

Bill Wielechowski, the Anchorage Democrat senator best known for grandiose speeches and feigned outrage, spent Tuesday afternoon in an Anchorage courthouse picking a fight with the governor.

The oral arguments before the Alaska Supreme Court in Wielechowski, Halford, and Tillion v. SOA APFC had a warm-up act outside that started at noon, when 50-70 people braved the rain and held homemade signs in front of the Boney Courthouse in a “save the PFD rally.”

Most of the rally participants were from outside of Wielechowski’s East Anchorage district, and they didn’t appear to be organized by him. Many protesters stayed to sit through the hour-long hearing. Former State Sen. Hollis French, a Democrat, was seen wandering through the crowd.

Citizens gather outside the Boney Courthouse in Anchorage on June 21 to protest the governor's veto of half of last year's Permanent Fund dividend.

Citizens gather outside the Boney Courthouse in Anchorage on June 20 to protest the governor’s veto of half of last year’s Permanent Fund dividend.

Proceedings consisted of Wielechowski, more subdued than usual, stating his case that Gov. Bill Walker overreached when he line-item vetoed half of the 2016 Permanent Fund dividend from the state operating budget. Dividend recipients received $1,022 from an estimated $2,100 they would have gotten.

Wielechowski was followed by the State’s case, amply presented by an eloquent and polished Kathryn Vogel from the Department of Law on behalf of the Permanent Fund Corp.

Finally, a 10-minute rebuttal was delivered by Wielechowski’s co-counsel, a nervous and tentative Sonja Kawasaki. Ms. Kawasaki is the sister of Rep. Scott Kawasaki (D-Fairbanks). She is a legislative staff aide to Wielechowski, and a recent judicial law clerk for the Alaska Supreme Court.

The case boils down to whether the annual transfer of a statutorily calculated sum from the Permanent Fund’s Earnings Reserve Account to the dividend fund for the annual payment of dividends requires an appropriation (something subject to the governor’s line item veto).

Wielechowski contends it is not an actual appropriation, therefore it cannot be vetoed. He contends the funds are an automatic statutory transfer, set up that way by the constitutional amendment that created the Permanent Fund in 1976. Statutory transfers are not veto material for the governor.

The State’s case in large part hangs on the constitutional power of the governor to check, or veto spending by the Legislature.

The appropriations clause, in a nutshell, says that if State money is going to be spent, it must be authorized through a legislative appropriation enacted in law. If it’s in a budget, the governor should be able to veto it.

That’s an important power for a governor to have, especially if the Legislature were to go on a spending spree.

Wielechowski, former Sen. Rick Halford and former Sen. Clem Tillion, who are the plaintiffs, allege that whether or not this transfer appears within the operating budget as an appropriation is irrelevant—it has been treated as a dedicated fund since the dividend’s creation, and it did not have a legally valid appropriation to be carried out until 2010 anyway.

Wilechowski also notes that it did not appear in budgets in the early 1980s, yet the money was still distributed.

Ms. Kawasaki, speaking on behalf of Wielechowski and rebutting the State, noted that the State operating budgets also contain an annual appropriation amount from the treasury to the corpus of the Permanent Fund to satisfy the Alaska Constitution’s requirement that at least 25 percent of state mineral wealth shall be placed in a permanent fund.

It would be hard to imagine any court sustaining an assertion that the governor could veto something so clearly required by the Constitution just because it appeared as an appropriation in the budget.

Yet, the Legislature continues to include that transfer as an appropriation in the budget, because accounting practices demand it. But that method of transfer is not what the court has been asked to rule on. The dedication of revenue to the Permanent Fund corpus appears in the Constitution, yet the dividend and its mechanisms do not.

Chief Justice Craig Stowers concluded the hearing by thanking the crowd in attendance. An unidentified man stood up and shouted: “with interest!” clearly alluding to a desire for the 2016 dividend to be restored to its full amount, and for Alaskans to be compensated for their loss.

The court has not said how long it will take to rule on the appeal.

Regardless of whether the court rules in favor of Wielechowski, which seems unlikely, the case will have effectively served its purpose. The implications of the lawsuit extend far beyond the potential influx of $683,234,813 into a beleaguered Alaskan economy — that’s the actual total which was vetoed. This is about the 2018 election.

The suit is a high-profile way for Wielechowski to simultaneously build a populist statewide following, poke a very unpopular governor and hit dozens of news cycles whilst casting himself in a positive light.

News stories about the PFD up through next year’s election will undoubtedly include a mention of Wielechowski and his lawsuit to “Save the PFD.”

The Alaska Legislature may have a budget deal in the works that will avoid a government shutdown on July 1. That compromise will likely be followed by a capital budget and then a trickle of legislators making public their decisions to run for governor or lieutenant governor.

Barring Mark Begich jumping into the fray, it’s a safe bet that Wielechowski won’t declare his intent to run for governor until after the court makes its ruling.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comment

  • Walker is toast along with all Legislators that opened up the Pandora Box called the PFD. The vast majority of Alaskans count on that check and what do you think they will do when it comes time to vote!
    The Dems played the Republicans for fools. The House Dem Majority voted to restore PFD when they adjourned so coming next election they will campaign as the party that will save the PFD,while the Senate Republican Majority voted along with Walker to take the PFD from the Alaskan People.
    We will end up with a Democratic Governor and Legislature along with a slew of new taxes and attacks on the oil industry. Not a bright future for Republicans.

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